The new AI Hardware Plan will support British companies developing chips and semiconductor technologies, with Silicon Valley backed funding.

Announced by Technology Secretary Liz Kendall at London Tech Week, the AI Hardware Plan will help to boost Britain’s sovereign artificial intelligence capabilities through supporting domestic industries.

According to the UK Government, the global AI chips market is expected to reach one trillion dollars in the early 2030s. If Britain could secure just 5% of this market, it would bring $50bn in revenue to the UK with tens of thousands of highly paid jobs in tech.

The AI Hardware Plan includes:

• £750m for a national AI supercomputer

A new national AI supercomputer will bring together current and next generation processors to run complex tasks more efficiently, in a heterogenous mixed-chip system. British-designed chips will be a crucial part of the system, which will join Isambard-AI and Zenith (alongside DAWN) as part of the UK’s AI Research Resource by 2030.

Of the £750m, £400m will go towards equipping the UK’s AI supercomputer with next-generation chips. £150m of this will be used to buy next-generation inference chips – which power the day-to-day use of AI tools – over summer 2026, creating immediate opportunity for British firms. The government is acting as an early customer to help bring new technologies to market. A further £250m will support the purchase of more specialised chips as more promising technologies mature.

• Backing British companies to develop new technology:

£120m will fund a new AI Hardware Innovation Programme, giving British companies funding security to design, develop and test innovative novel chips.

At least £20m of the programme will expand the Scaling Inference Lab, delivered by ARIA and CommonAI, to help companies attract investment and secure partnerships with global tech firms. British AI company Oriole Networks, working with AMD through the Lab, will deploy the world’s first large-scale AI system that uses light rather than electrical signals to move data between chips, boosting the performance of UK data centres.

• Boosting skills needed by the AI hardware sector:

An additional £45m in new support for skills brings the UK government’s total skills investment to £80m. This will include backing doctoral training and undergraduate bursaries to train more engineers, chip designers and technicians, and open up clear pathways into the sector from university and on-the-job training to build the pipeline of British talent.

A new Silicon Valley investor fund will also be launched

Silicon Valley investors Playground Global – whose partners include Pat Gelsinger, former CEO of Intel –  and backed by up to £150m from the British Business Bank, will invest in UK-based AI hardware companies, subject to completion of due diligence and legal negotiations.

Developed by DSIT, the fund is the single largest fund investment the British Business bank has ever made.

Playground Global will also open its first office outside the US in the UK, further supporting the government’s drive to position the UK at the forefront of the AI revolution.

Technology Secretary Liz Kendall said:

“AI is the defining currency of economic and hard power in today’s world and the countries that control the hardware behind it will hold the keys to the future.

“The UK is already a global leader in chip design, and I believe this is a race Britain can win. To do that, we must back more British AI – and that means investing in the chips, computing power and skilled people behind it.

“That is exactly what this plan does, backing the British firms developing the next generation of AI hardware, so we get more jobs, more growth, and more control over the technologies our future depends on. We are backing Britain because we believe in Britain.”

The UK government is also doubling the compute available through the AI Research Resource to firms backed by the Sovereign AI fund. This includes a new £12m Centre for Doctoral Training in Chip Design to train the next generation of chip designers in UK universities, and working with employers to open up more routes into semiconductor and AI hardware careers.

The government’s existing semiconductor skills programme will also expand, funding 300 undergraduate bursaries this year, 400 from next academic year and 500 the year after, with the total budget increasing to £48m.

The government has agreed a new strategic industry partnership with Arm, expanding the TechFirst programme to support 500 more UK PhD students in strategically critical fields like chip design and AI hardware.